The Philippines has just decided to reduce rice import tax to 15%, which not only benefits the country's consumers, but also opens the door for Vietnamese rice exporters. In the context of an increasingly competitive global rice market, this decision brings great opportunities for Vietnam to increase exports and dominate this market.
In the first quarter of 2024, the Philippine economy was relatively stable, but rice prices increased by about 24.4%. Rice accounts for about 9% of the Philippine consumer price index. According to the Vietnam Trade Office in the Philippines, Vietnam has always been the largest rice exporter to the Philippines, accounting for over 80% of the total rice imported into this market.
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| The Philippines' reduction of rice import tax to 15% creates conditions for Vietnamese rice to continue increasing exports and capturing potential markets (Illustration photo). |
The global rice market is facing many challenges, including climate change, geopolitical conflicts and supply chain disruptions. It is forecast that the world will have a food shortage of about 5 million tons in 2024 due to limited supplies. Global demand for rice is high, especially in Asian countries where rice is a staple food. This puts great pressure on rice exporting countries such as Vietnam, Thailand and India.
In this context, the Philippines has decided to reduce import tariffs on rice to ensure domestic food supply and stabilize prices. This decision not only helps reduce imported rice prices but also creates opportunities for rice exporting countries, especially Vietnam, to increase exports to the Philippine market. With lower tariffs, Vietnamese rice can compete more strongly in price with rice from other countries, especially Thailand, another major rice exporter in the region.
New opportunities for Vietnamese rice
The reduction of import tax in the Philippines opens up a great opportunity for Vietnamese rice to increase exports to this market. Over the past two years, Vietnamese rice has always been the world's leading rice with high prices, plus a 35% import tax, making it difficult for partners like the Philippines to buy goods.
According to Mr. Nguyen Ngoc Nam, Chairman of the Vietnam Food Association (VFA), “the Philippines’ decision is a positive signal for the Vietnamese rice industry. We can take advantage of this opportunity to increase export output, especially high-quality rice.”
Currently, the Philippines is one of Vietnam's major rice import markets, accounting for a significant proportion of Vietnam's total rice export turnover. In 2023, rice exports to the Philippines will reach nearly 3 million tons, accounting for about 40% of Vietnam's total rice exports.
In addition to increasing exports, the reduction of import tariffs will also support the price of Vietnamese rice to remain high. As demand for rice increases, Vietnamese rice producers and exporters can maintain higher selling prices, ensuring better profits for farmers and businesses in the industry. This also encourages farmers to invest more in production, improving the quality and yield of rice.
The Philippines’ reduction of import tariffs on rice has opened up great opportunities for Vietnam’s rice export industry. However, to make the most of this opportunity, Vietnamese enterprises need to have a sustainable development strategy, invest in technology and quality, and build a strong brand in the international market. In the context of increasing global food demand and new markets opening up, Vietnamese rice has great potential to rise, affirm its position and bring great economic benefits to the country.
Improve product quality
The Government has issued Directive 10/CT-TTg on promoting sustainable, transparent and effective production, trading and export of rice. This Directive emphasizes the importance of ensuring product quality, increasing added value and expanding export markets.
Mr. Nguyen Van Viet, Director of the Planning Department, Ministry of Agriculture and Rural Development said: “Directive 10/CT-TTg is the guideline for the rice industry in the coming period. We will focus on improving product quality and expanding export markets.”
In addition to traditional markets such as the Philippines, increased rice exports also open up opportunities for Vietnamese rice to penetrate new markets. In the first months of 2024, Vietnamese rice recorded breakthrough growth in high-end markets such as the EU and the US, with growth reaching triple digits. This shows the great potential of Vietnamese rice not only in traditional markets but also in high-end markets where high product quality is required.
Ms. Nguyen Thi Cam Tu, Director of Hoang Anh Rice Import-Export Company, shared: “We have invested a lot in improving rice quality and meeting the strict standards of the EU and US markets. As a result, rice exports to these markets have increased sharply, opening up great opportunities for Vietnamese rice.”
When exporting to high-end markets such as the EU and the US, product quality requirements are very high. Vietnamese enterprises need to ensure that exported rice fully meets the quality and food safety standards of these markets. This requires investment in production technology, quality control processes and strict compliance with food safety regulations.
Mr. Vo Hong Quoc, Director of Viet Rice Company, commented: "To succeed in demanding markets such as the EU and the US, we need to invest heavily in technology and production processes, ensuring rice quality meets international standards."
Reorganize and reorganize the production value chain
According to Professor Vo Tong Xuan, a leading rice expert in Vietnam, the rearrangement and reorganization of the rice production value chain is necessary to achieve the goal of 1 million hectares of high-quality rice. “Reorganizing the value chain not only helps improve production efficiency but also ensures sustainability and transparency in the rice industry. We need to have synchronous measures from production, purchasing, processing to export, ensuring that all stages operate effectively and are closely linked together,” Professor Vo Tong Xuan commented.
Applying high technology in rice production and processing is an important factor to improve product quality and value. Enterprises need to invest in modern technology, from production to processing and packaging, to ensure the quality of exported rice meets international standards.
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| Businesses need to invest in modern technology, from production to processing and packaging, to ensure the quality of exported rice meets international standards (Illustration photo). |
Mr. Pham Thai Binh, Director of Trung An High-Tech Agriculture Joint Stock Company, shared: “We have invested heavily in rice production and processing technology. As a result, our rice products are not only of high quality but also highly appreciated in the international market.”
Farmers play a vital role in the rice supply chain. Therefore, supporting farmers to improve farming techniques, access capital and markets is a key factor to ensure a stable and sustainable rice supply. Support, training and extension programs need to be strongly implemented to improve rice productivity and quality.
In addition, building and developing the Vietnamese rice brand in the international market is an important factor to enhance the value of products and affirm the position of Vietnamese rice in the global market. Enterprises need to focus on building brands, from packaging and label design to promotional and marketing activities.
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